Boards need experienced and courageous Non Executive Directors who constructively criticise strategic decisions from a point of absolute neutrality, knowledge and balance. It is not just a matter of attending board meetings but to critically evaluate the direction the company is moving in and the actions it takes.
Naturally enough within the board the greatest influences are likely to be the CEO and the Chair. A powerful CEO or Chair will seek to follow a strategy which enables him/her to work according to their preferred style whether that is exploring acquisition, organic growth, low or high risk approach etc., The effective Ned must be able to assess the weaknesses and strengths of decisions being pushed by strong personalities and bring balance and clarity to board strategy. Furthermore they must have their finger on the very pulse of the market, the organisation and the future trends with the foresight to recognise the risks and opportunities. Finally they need strong interpersonal and intuitive skills enabling them to harmonise the board’s strategic ability.
In a capable Ned these skills will have been honed over years of experience and training but they must also have the courage to confront what are likely to be uncomfortable, tough issues.
The duration of office for an NED should be limited to ensure continued interest and objectivity; this is often ignored with NED’s being in office long past the point where they have a valuable input.
It certainly appears that weak NED’s could have contributed to the downfall of many well know companies over the last 5 years and it is time that Boards critically evaluate their Non Executives.